Offering the first real hope that Greece could emerge from a six-year recession, the government on Monday presented a draft budget for next year forecasting a tenuous return to growth. The economy, which has shrunk by a quarter since 2007, is expected to contract 4 percent this year but grow 0.6 percent in 2014, largely the result of an increase in tourism and exports, according to the blueprint. It also predicted that unemployment would dip to 26 percent from 27 percent. “This year, the sacrifices have begun to bear fruit, giving the first signs of an exit from the crisis,” Christos Staikouras, a deputy finance minister, told reporters. The forecast could be a turning point for a country whose tiny economy threatened the future of the euro zone. It has been bailed out twice by international agencies and remains racked by the region’s highest unemployment and frequent public protests over government cuts. But some economists in Greece doubted that the economy was improving. Achieving growth of any size would be “very difficult,” chiefly because there has been no significant increase in investments, Haralambos Gotsis, an economics professor at the University of Piraeus, told Greek television.

George Pagoulatos, a professor of European economy and politics at Athens University, was more optimistic. “It’s not inconceivable, it’s feasible,” he said by telephone, “as long as they stick to structural reforms and find some sort of solution to the debt.” The hedge fund billionaire John A. Paulson also gave the battered Greek economy a vote of confidence. He told The Financial Times that he had taken substantial stakes in Piraeus and Alpha banks. They are both “now very well capitalized” and poised to recover, he said, adding, “The Greek economy is improving, which should benefit the banking sector.” Officials of the so-called troika — the European Central Bank, European Commission and International Monetary Fund — which have extended the country two loan packages worth 240 billion euros, or $325 billion, over the last three years, are expected to propose significant revisions to the draft budget, as they have done with previous budgets. Mr. Staikouras predicted a small primary surplus — a budget surplus not counting debt financing — of 340 million euros for this year and a 2.8 billion euro surplus for 2014. Greek officials are eager to show a surplus, since troika officials have said it could be the basis for discussion of some kind of debt relief.

“We will seek the contribution of our partners in helping toward the lightening of the debt,” Mr. Staikouras said. Greece’s debt is 321 billion euros. Greece will continue to receive payments from the second bailout until next spring, when talks are expected to begin with international creditors on a potential third bailout. That aid would be much smaller than the first two rounds, to cover an estimated financing gap of 11 billion euros for the next two years. The country has gradually been paying off its debts from an account opened last year at the Bank of Greece, and will continue to do so after it returns to international bond markets in 2014 or 2015. But given the overwhelming size of Greece’s debt, about 175 percent of its total economy, it remained unclear when Greece will be able to stop paying off what it owes with borrowed money. Euro zone officials, in particular those in Germany, which has contributed the largest share to Greece’s bailouts, have repeatedly rejected the prospect of a second debt loss for Greece’s creditors after a write-down of privately held Greek debt last year. Other relief has not been ruled out, including a further reduction in interest rates and an extension on maturities on loans.

The International Monetary Fund has been more open to a possible loss to make Greece’s debt sustainable. And many prominent economic specialists have expressed doubt there is any other viable solution for Greece. In an interview with Der Spiegel of Germany published on Monday, the billionaire investor George Soros said there was no other choice. “Everyone knows that Greece will never be able to pay off its debts,” he said. Mr. Soros added that private investors would return to Greece only if the “official sector” eased some of its demands. Talks with troika officials will resume next week on the progress of Greek economic overhaul efforts, including what to do about the financing gap of 11 billion euros. After the troika envoys suggest amendments to the draft budget and issue their next economic review next month, the budget will go to a vote in the Greek Parliament.

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Greece suspends state financing for far-right party

Greece’s Parliament voted early Wednesday to suspend state financing for political parties whose leaders or elected officials are charged with serious crimes, part of a continuing effort to rein in the neo-fascist Golden Dawn, which is under investigation on charges involving murder, blackmail and other offenses. After several hours of heated debate, the measure passed with 235 votes in the 300-seat House. It garnered the support of the conservative-led coalition; all but two lawmakers from the main leftist opposition party, Syriza; and a small leftist party. The two Syriza lawmakers who broke ranks were prominent, and their decision could create tension in that party. Addressing Parliament before the vote, Golden Dawn’s spokesman, Ilias Kasidiaris, who is among the lawmakers who have been charged, called the bill “illegal and unconstitutional” and “a coarse violation of the right to be assumed innocent before proven guilty.”

The bill stipulates the indefinite suspension of state financing for parties whose leadership, or one-fifth of their lawmakers, are charged with terrorism or membership in a criminal group. It had been expected to pass easily despite concerns by some opposition lawmakers that the governing coalition, which has a slim majority, could try to use the legislation to target other parties. Last week, Parliament lifted the immunity of six Golden Dawn lawmakers, paving the way for prosecutors to bring a range of charges against them. The party leader, Nikos Michaloliakos, and two other senior members of Parliament are in custody on charges of belonging to a criminal organization. Another Golden Dawn lawmaker was released after being arrested last month. The authorities began the crackdown after a series of violent assaults linked to party members and supporters that culminated last month in the fatal stabbing of an anti-fascist rapper by a professed party supporter.

Wednesday’s decision was another step toward draining Golden Dawn of power. Since it emerged from obscurity and entered Parliament in the summer of 2012, the party has received about 500,000 euros, or close to $700,000, in state financing. Golden Dawn’s coffers also reportedly received 200,000 euros, or about $275,000, from the salaries of its 18 members of Parliament, a 20 percent donation that Mr. Michaloliakos is said to have demanded. Golden Dawn is thought to have benefited from at least an additional two million euros, or about $2.75 million, from other sources. The cost of maintaining its dozens of offices across the country and financing its “Greeks only” food distribution and blood donation campaigns is estimated at two million to three million euros, according to reports in the Greek news media.

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Greece’s aggressive pursuit of tax evaders appears to collect more anger than money

The tax inspectors swept into this picturesque village in Crete during the middle of a saint’s day celebration recently, moving from restaurant to restaurant demanding receipts and financial records. Soon, customers annoyed by the holiday disruption confronted them. Pushing, shoving and angry words followed, and eventually the frightened inspectors were forced to flee. “People are so angry and so poor,” said Nikolis Geniatakis, who has run his restaurant here on the main square for the last 34 years and who watched the confrontation from across the street. “What were the tax inspectors doing here? Why aren’t they going after the big fish?”

If Greece is ever going to get its public finances in order and escape grinding budget austerity, it will have to do a better job collecting taxes. For years, economists have pointed to rampant tax evasion as one of the country’s most serious problems, depriving the government of money it badly needs. But as the confrontation in Archanes shows, the effort to collect taxes has not gone well; having inspectors run out of town is hardly evidence that the rule of law is taking root in the Greek economy. Rather than instilling a sense of fairness, the more aggressive tax collection program in some ways appears to have aggravated the problem. In particular, attempts to cast a broad net have only fuelled public anger at the wealthy, which are often seen as the main culprits. In the early days of the economic crisis here, Greek officials optimistically predicted that tax collection would soon improve. They bragged of using aerial photographs to get tax evaders who failed to declare their swimming pools on tax returns as required. They zeroed in on doctors who reported low incomes but who somehow paid high rents in affluent neighbourhoods.

But despite such headline-grabbing efforts and an astonishing number of new tax laws (22 in the last two years), some question whether the authorities are actually making progress. At the end of 2011, tax arrears totalled 45 billion euros, or about $62.1 billion. At the end of 2012, €56 billion, or about $77.3 billion. At the end of July, with the most active tax period to come, the arrears had risen to €60 billion, or almost $83 billion, equivalent to nearly a fifth of the government’s public debt. Experts say many of the tax collection measures are not effective, especially those aimed at the rich. Taxing yacht owners, for instance, only encouraged them to moor their boats elsewhere, emptying Greek marinas. Efforts to overhaul the tax system, many accountants say, have created such a confusing jumble of laws that it will take months, if not years, to understand them. Consolidating and reorganizing the tax bureaus, intended to save money in the long run, has created an administrative nightmare in the short run, with files arriving months after a move, if at all, union officials say. But perhaps as troublesome, some experts say, is the growing grass-roots anger that led the customers to turn against the four tax inspectors recently in Archanes. Tax collectors have been threatened or chased out of many towns, union officials say, though only a few cases, like the one here, get much attention. For Mr. Geniatakis, the arrival of the tax inspectors was the kind of showy government move that hurts the little guy but amounts to nothing. In these hard times, he and the other restaurant owners had pooled €1,000 each, about $1,380, for music and decorations, only to see their investment disappear with the crowds when the scuffle began. “They are driving us crazy, but what about the Lagarde list?” he said, referring to about 2,000 tax evasion suspects with Swiss bank accounts whose names were turned over to Greek officials in 2010.